The Value of Frequent Flyer Miles

One of the ways that I was able to afford so many flights during my sabbatical was that I used frequent flyer miles and credit card points for many of the more expensive legs. I had been saving miles for years by taking advantage of credit card bonuses (but never buying things I could not afford and always paying off my balance at the end of the month), and so I had planned to use these miles to cut down on the cost of the dozens and flights I booked throughout the year.

To calculate the value of the miles or points, you take the value of the flight in dollars, subtract the amount of taxes and fees paid, and then divide by the number of miles/points used. Let's look at an example:

  • My flight from Dubai, UAE to Fukuoka, Japan cost me 35,482 points and no taxes. If I were paying cash, it is possible to find similar flights for $323. So we have 323 / 35482 ≈ 0.91 cents per mile. This is actually a bad use of miles (though when I booked the flight, they were not as cheap, so it seemed like a better deal). Any time your miles/points are worth less than 1.5 cents each, it is usually a bad use of miles.
  • My flight from Fukuoka, Japan to Ishigaki, Japan cost me 5,000 miles and no taxes. If I were paying cash, the only direct flight would cost me $194. So we have 194 / 5000 ≈ 3.9 cents per mile. This is an excellent use of miles!
  • My flight from Nadi, Fiji to Tokyo, Japan cost me 40,000 miles and $185 in taxes for a BUSINESS CLASS seat with a layover in Sydney to see friends. The cheapest flight in business class (which would not even give me the layover I wanted) would cost $1,731. So we have (1731 - 185) / 40000 ≈ 3.9 cents per mile. Another excellent use of miles!

Looking back, there were some flights that were great uses of miles and others where I probably would have been better off paying in cash. If I ever take a sabbatical again, I will have to be more careful in the decisions I make for flights!

Sample Problems

1. My flight from Buenos Aires, Argentina to Maputo, Mozambique cost me 51,708 miles and no taxes. If I were paying cash, a similar flight would cost $1,266. Calculate the value of miles for the flight and determine whether it was a good use or a bad use of miles.

2. My flight from Kigali, Rwanda to Kathmandu, Nepal cost me 35,000 miles and $50 in taxes. If I were paying cash, a similar flight would cost $580. Calculate the value of miles for the flight and determine whether it was a good use or a bad use of miles.

3. My flight from Bangkok, Thailand to Nadi, Fiji cost me 40,000 miles and $70 in taxes. If I were paying cash, the flight would cost me $2,148 for a business class seat. Calculate the value of miles for the flight and determine whether it was a good use or a bad use of miles.